American Airlines announces thousands of job cuts

by Alister POOLE on February 2, 2012

American Airline’s parent company says that it will shed at least 13,000 jobs – which is roughly around 15 per cent of its workforce.

AMR wants to slash staff costs by 20 per cent in an attempt to bring down spending by $2bn while raising company revenue by $1bn per year. The parent, which was forced into filing for bankruptcy protection late last year, also wishes to make adjustments to staff pensions.

American Airlines 88,000 strong workforce is being represented by three unions that have understandably voiced their opposition to the changes. Negotiations with the three unions are to start shortly, confirmed AMR.

AMR lost $884m over 2011’s first nine month and disclosed $904m in losses for December. Since 2001, the company has seen in excess of $11bn slip through its fingers with Thomas W Horton, the chief executive, citing that changes are needed if AMR and American Airlines are to see their fortunes reversed.

The biggest cuts – of around 4,600 – will be among maintenance workers. Just behind them though are baggage handlers as 4,200 of them might be unemployed in the near future. Additionally, 2,300 flight attendants, 400 pilots, and 1,400 management employees could also be looking for new work.

AMR also wants union approval needed to drop its pension plans and then replace them with retirement accounts. The company stated on its website yesterday that it can no longer afford pension plans that see 130,000 former staff paid out every week.